Coronavirus and corporate kindness
JOHANNESBURG - Corporate South Africa has been rocked by the events of the last few weeks, as the Covid-19 crisis has disrupted the plans, expectations and routines of millions of citizens, according to Just Share, a shareholder activist organisation and NPO.
It said despite the recent dramatic volatility of the stock market, listed companies and their shareholders remained some of the most powerful economic actors in our society.
In South Africa, pre-existing extreme inequality in wealth, income, access to health care and education would mean that Covid-19 would disproportionately impact poor and under-resourced communities. This crisis has the very real potential to exacerbate these inequalities even further.
Just Share said that w hile acknowledging the considerable economic uncertainty facing large swathes of the economy, many of the biggest South African companies - and the institutional investors that own shares in them on behalf of ordinary people - had the financial resources, political influence and resilience to weather economic storms.
The success of these companies was founded on the contributions of their staff, and the business of their customers. As shaken and disrupted as they may be, corporate leaders still have a choice: would they hunker down and focus solely on protecting profits and executive pay? Or will they also deploy their resources to act in the long-term interests of our society, by doing what they can to protect those most vulnerable to this sudden socio-economic shock?
There were many ways to be a kind corporate citizen during this crisis, it said. The most proactive companies were already making sure that, where possible, they:
- Pay for medical tests for those who have been exposed.
- Pay suppliers on time, or early, especially small businesses.
- Provide paid sick leave for regular employees, and sick pay for temporary or insecure workers.
- Support contract workers – cleaners, caterers, maintenance staff, security staff etc. – to ensure that they are not abandoned and unable to earn a living when most staff are working from home and office buildings are empty.
- Stagger working hours to reduce contact and support employees who now have to care for children at home.
- Implement reduced hours rather than redundancies.
- Some initiatives by South African businesses during this crises:
- Anheuser-Busch InBev is “using technology from our non-alcohol brewing process to create disinfectants from the surplus alcohol” to manufacture “over 1 million bottles of hand sanitizer to donate to hospitals and frontline workers around the world”. In Africa, SA Breweries is donating alcohol to help in the manufacture of hand sanitizer, and “SAB’s extensive fleet and route network of our breweries will be used to deliver the finished product to the most remote parts of the country”.
- Makro has given pregnant staff the option of paid special leave to “reduce the risk of infection to themselves and their unborn children during this crisis”.
- Responding to suggestions from customers, since 18 March Pick ‘n Pay has been opening all supermarkets an hour earlier every Wednesday exclusively for customers over the age of 65.
- SweepSouth, which employs thousands of home cleaners, is setting up a partnership to generate a pool of funds to “reduce the financial burden that the pandemic will most certainly bring about for some of the economically most vulnerable members of our society (due to self-isolation or positive test results)". The company has asked clients who cancel their bookings due to self-isolation to consider contributing to this fund.
Just Share said this crisis would create new kinds of social and governance risks.
"Responsible investors should be prepared to challenge companies that refuse to pay sick pay and benefits, or which call for deregulation which is unrelated to managing the crisis (like delaying carbon taxes and climate change regulation), or take any action that looks like exploitation of the crisis for short term gain," it said.
The manner in which listed companies manage their annual general meetings to ensure that shareholder participation is not compromised is something to watch, and voting on remuneration packages and share buybacks should also be carefully considered in light of these dramatically changed circumstances.
BUSINESS REPORT ONLINE